The game of baccarat is believed to have originated in Italy around 1480, probably derived from a medieval card game called Tarrochi.

One interesting theory states that Baccarat is based on an old Etruscan ritual of throwing a nine-sided die to determine the fate of a blonde woman still a virgin who is candidate for high priesthood. Accordingly, the virgin blonde cast the nine-sided die and the outcome will determine whether she will become a priestess (if 8 or 9 lands), be prevented from any form of religious activity but stay alive (6 or 7), or be put to death (other numbers).

These numbers are similar to the numbers used in Baccarat. Each hand's value ranges between zero and nine, where eight and nine are the best possible values, 6 and 7 are hands with a good chance of winning and the other numbers are considered losing hands.

Baccarat was introduced to France during the last decade of the 15th century. The game of Baccarat immediately became one of the favorite games among the members of the French nobility, including the King, always looking for exciting forms of entertainment. Consequently the game became known as "Chemin de Fer in France, in reference to the iron box where the cards are kept (as fer means iron in French).

Baccarat then reached England, where the British changed some of the rules. There the name of the game became "European Baccarat" or "Baccarat Banque". The American version of baccarat originally came from the Capri Casino in Havana, Cuba, which is mainly derived from European baccarat, but different. This is why the game carries the Spanish denomination "Punto Banco" in the United States.

Baccarat started to be played in Las Vegas, at the Dune Casino around 1960. The Punto Banco version played in the USA is purely a game of chance, as the players have no decisions to make, as the rules specify how the cards should be played. On the other hands the two European rules involve some strategy as the players can decide to draw a third card or not.

Today, Baccarat is a true passion for live players but also players live online. It is extremely popular among Asian gamblers including in the big casino city of Macau. Baccarat is the game of choice for high rollers. This is normally the game with the largest bets (which can reach $100,000 per hand or more), and this is the game that generates the most profits for casinos even though it is only played by a minority of their visitors.